Futures Settlement

Discussion in 'Index Futures' started by KrispyKreme50, Aug 23, 2008.

  1. Sorry to keep asking these questions, but how are futures settled in terms of time (for example, stocks are T+3, options are T+1)? Thanks in advance.
     
  2. Jachyra

    Jachyra

    Futures transactions are settled the same "trading day" that the trade occurs. Keep in mind that a trading days do not necessarily correspond with calendar days.
     
  3. Does that mean you can trade unlimited contracts as long as you close trades and pay commissions?
     
  4. Surdo

    Surdo

    What do mean by "unlimited contracts"?
    As soon as you close out a position you have all of your buying power back +/- the P&L created that day.

    There is tons of educational material on the CME website, you would learn a lot more and look lot more intelligent than posting these elementary school questions.

    They will even send you a free cd if you ask!

    http://www.cme.com/edu/res/intro/futures/index.html

    http://www.cmegroup.com/education/knowledge-center-home/index.html
     
  5. Jachyra

    Jachyra

    Of course you can't trade an unlimited number of contracts.... every time you do a trade the margin required for that trade is deducted from your "available credit" (so to speak)... when you close the trade out that amount is added back to your "available credit"... as long as you have enough "available credit" in your account when you place an order to open a trade, you can do it... if you don't have enough most likely your broker's risk management server is going to reject the order and prevent the trade from going through.

    If you're asking whether or not the trade has to clear before the "available credit" is added back to your account the answer is usually no.... but even if they did, the trade would be considered settled prior to the opening of the next day's trading session (which in the ES is 15 minutes after it closes.).
     
  6. Mercor

    Mercor

    There are limits to how many total contracts you can have open at one time.
     
  7. Thank you that's what I was meaning to ask. I thought the terminology for futures wouldn't be that different from stocks, but it looks like Futures for Dummies in the meantime for me.